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Note on Journal

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Journal is the first step of the accounting process. It is also the first book to keep the systematic record of all the business transactions with the first entry of all financial transactions. It is the original or primary book in which the financial transaction is first recorded in the order of date and helps to maintain the principal book or ledger. It is the book of prime entry in which each and every transaction is registered showing debit and credit aspects with a brief explanation which is called narration.

Some of the main definitions of journal are:

"A journal is a book, employed to classify or sort out transactions in a form convenient for their subsequent entry." -L.C. Cropper

"The journal or daily record as originally used was a book of prime entry in which transactions was copied in order to date from a memorandum or waste book. The entries as they were copied, were classified into debits and credits, so as to facilitate they are being correctly posted afterwards in the ledger." -R. N. Carter.

From the above definition, it is clear that journal is the primary record of all the financial transactions in which each and every transaction is registered showing all the debit and credit account balances.

Objectives

The following are the main objectives of journal:

To make the permanent and systematic records of all the financial transactions.

To help in preparing the principal book i.e ledger.

To provide the legal evidence for all the financial transactions performed by the organization.

To present all the complete information of each financial transactions.

To show all the debit and credit aspects or accounts involved in each and every financial transaction.

Journalizing

All the financial transactions are first of all recorded in the books of the journal. Journalizing is the process of recording the financial transactions in the journal in a systematic way. The record of the transactions that is made in the journal is called journal entry. Journalizing is the act of passing the journal entry in the books of account. The following steps are to be taken into consideration while journalizing the transactions in the journal book:

Identifying the two aspects of the transactions.

Identifying the appropriate accounts for two aspects of the transactions.

Identifying the debit and credit accounts of the transactions by applying the rules of debit and credit.

Giving the entry for the transactions in the book of a journal in chronological order.